Handbook of Safeguarding Global Financial Stability

Chapter 44

Independence and Accountability of Regulatory Agencies

M. Taylor

Central Bank of Bahrain, Manama, Kingdom of Bahrain and Homburg Academy, Kusnacht, Switzerland

Outline

Introduction

Independence and Accountability in Theory

Lack of Independence Worsens Financial Crises

The Example of Central Bank Independence

Four Dimensions of Independence

Critics of Agency Independence

Ensuring Accountability

Independence and Accountability in Practice

Making Regulatory Independence and Accountability Operational

The Importance of the Political Framework

The Institutional Structure of Regulation

Empirical Work on Independence and Accountability

References

The case for the independence of regulatory agencies is essentially twofold: first, that the absence ...